Climate change is a financial risk. With its new Climate Guide, WWF’s objective is to support EU asset owners - pensions funds, insurance companies and sovereign wealth funds - and show how they can align their investments with the objectives set in the Paris Agreement of working to keep temperature rise to 1.5°C.

This is crucial not only for fighting climate change but for reducing the financial risks associated with climate change, and for harnessing new investment opportunities.

“Investing in climate action instead of climate destruction is a win-win - not only it will protect the planet but it will also reduce financial risks and maximise returns”, said Sebastien Godinot, Economist at WWF European Policy Office.

The guide’s recommendations to asset owners include assessing and publishing the climate alignment of their portfolios, and taking steps to align them with the Paris Agreement. For example, integrating climate change into their investment policy, setting science based targets and engaging with the companies that they have in their portfolio.

A WWF report published last July shows that some of the EU's biggest asset owners - mainly pension funds, from the Netherlands, Denmark, Sweden, Norway and Finland - are partly aligned with the Paris Agreement's climate target of keeping global warming well under 2°C; however, many still invest too much in coal power and lag behind on renewable power.

“The pace and scale of action required to comply with the Paris Agreement does not leave room for procrastination”, said Godinot. “Some European asset owners are showing leadership, but much more needs to be done to reallocate investments. Our report aims to help them move faster and further.”

In the coming weeks, WWF will publish two complementary sector-specific guides to asset owners on coal mining and on coal and renewable power, two critical sectors climate-wise.